There’s been a huge amount of flows into the tech sector this year, according to Deutsche Bank AG who see over $40 billion in cumulative global flows. However, with the Fed signalling higher rates for longer in last weeks meeting and concerns growing about the impact of those high rates as yields search higher. Will it rotation out of text talk soon begin.
Looking at the NASDAQ, it does tend to have a pattern of seasonal weakness during September and business conditions are certainly more challenging now if high rates are to come. Over the last 15 years from September the 26 of October 8, the NASDAQ has fallen average 1.43%. Will those falls repeat themselves again this year? is it time for tech to tumble?
Major Trade Risks:
The major trade risks here is that previous seasonal patterns do not necessarily repeat themselves each year and perhaps some incoming US data will alter the expectations for the path of US rates.
Remember don’t just trade it, Seasonax it!